More Employers Planning to Change HR Structure

August 23, 2012 (PLANSPONSOR.com) - An increasing number of global organizations expect to change the structure of their HR functions within the next couple of years, according to an annual survey from Towers Watson.

The 15th annual survey about HR service delivery trends and practices found 44% of the 628 global organizations surveyed indicated they will change their HR structure either this year or next year—a sharp increase from the 28% of respondents who planned to change their HR structure last year. When asked what is driving these changes, nearly two-thirds of those planning changes said they want to realize further efficiencies, while roughly half is seeking to capture synergies among processes and investments, improve quality and lower costs.

The survey showed that among companies making changes to their HR function, nearly four in 10 (39%) will move or revert to a shared services environment, while nearly one in three (31%) will bring additional services into an existing shared services organization. More than one-fourth (26%) will outsource some or additional HR functions.

“Large-scale HR business process outsourcing was all the buzz for nearly a decade,”said Tom Keebler, global leader of Towers Watson’s HR Service Delivery and Technology practices. “But organizations now realize that it pays to develop capabilities and resources in-house for many core HR services. Shared services allow companies to maintain better quality control, and create and adapt to new processes more quickly. This model also enables organizations to allocate resources according to functional need and business cycle, although this can be both a blessing and a curse, since the process often suffers at the hand of speed.”